Details of TCE deal emerge

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The General Services Administration has agreed to help the Treasury Department cancel its Treasury Communications Enterprise contract, as part of an agreement that will bring Treasury's telecommunications business to GSA.

The two agencies signed a memorandum of agreement Dec. 20, 2006. The pact marked the culmination of GSA's effort to persuade Treasury to drop the competing contract. Acting Treasury Chief Financial Officer Richard Holcomb and GSA Administrator Lurita Doan signed the agreement, which was obtained by Government Computer News. a sister publication of Federal Computer Week.

GSA agreed to cut in half the fee Treasury will pay to use Networx, a concession that has raised some alarms. Bob Woods, president of Topside Consulting, said other large agencies might seize upon the agreement to use as leverage in trying to negotiate their own discounts.

The actual revenue loss to GSA may not be significant, especially because getting Treasury to pay half the normal fee is more money than if the agency had shunned Networx altogether, Woods said. But, he warned, "it could enter them into a customer-by-customer negotiation of the fee.”

Treasury's part in the agreement includes announcing the cancellation of TCE in favor of Networx, and providing GSA access to its contract files as part of the cancellation process. GSA agreed to split the legal costs of the cancellation with Treasury.

The agencies have mostly declined to comment on the agreement or to answer any specific questions about concerns such as the one Woods raised. A GSA spokesman said late Friday that the agencies are in the process of informing members of Congress and promised to provide more details after that is completed.

GSA and Treasury have not officially released the MOA, which was obtained by an FCW sister publication.